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About CoinDesk • World leader
in digital currency news, prices and information • Our Bitcoin Price Index serves as an industry reference point • London-based and remote team with a global focus • Our editors are based in London, Boston, San Francisco, and Tokyo State of Bitcoin Q2 2014 3

Q2 2014 Summary Stories mentioning
‘bitcoin’ in the mainstream media rose 439% from 2012/13 to 2013/14 Bitcoin’s price has bounced back: up 39.4% from end of Q1 but still down 16% from start of year Approximately 63,000 business now accept bitcoin; 5.3m total wallets Regulatory environment continues to see positives (eg California) and setbacks (eg Bolivia) All-time bitcoin VC investment of $240m; 2014 run rate of $280m+ Larger, more established consumer brands are adopting bitcoin (eg Dish, Expedia) State of Bitcoin Q2 2014 4

The Timing and Scale of
Bitcoin’s Disruptive Potential • “Bitcoin-related technologies will disrupt payments markets and other trust-based markets within the next few years and for decades to follow.” • “US bank fees generate $250 billion a year and global payments-related revenues exceed $300 billion a year.” • “We also see an emerging bitcoin opportunity within the Internet of Things.” Gil Luria Wedbush Securities State of Bitcoin Q2 2014 13

Some Intellectuals Remain Skeptical, While
Others Recognize Bitcoin’s Potential Niall Ferguson “It would be unwise to assume, as some do, that it poses no challenge at all.” Larry Summers “I think bitcoin has the potential to be a very, very important development.” Ken Rogoff “Not a currency; it isn’t going to be a currency.” State of Bitcoin Q2 2014 22

BitPay’s $30m Round was the
Largest Bitcoin VC Deal to Date • More than 30,000 total merchants • As of January 2014, adding more than 1,000 merchants to its network each week • Processing $1m in bitcoin payments every day • Processed more than $100m in bitcoin payments in 2013 • Most recent VC round valued BitPay at $160m State of Bitcoin Q2 2014 25

Europe Passed Asia in Total
Bitcoin VC Investment in Q2, Both Still Lag North America $ Invested No. of Companies Regions Value ($m) No. of companies Asia 20.8 13 Europe 30.9 5 S. America 2.0 1 N. America 186.3 30 Total $240.0 49 Asia 9% Europe 13% South America 1% North America 78% Asia 27% Europe 10% South America 2% North America 61% • Over a quarter of VC-backed bitcoin companies are based in Asia • 78% of all bitcoin VC $s have been invested in North America to date, but only 61% of the companies are based there Source: CoinDesk (http://www.coindesk.com/bitcoin-venture-capital/) State of Bitcoin Q2 2014 33

Investor Views on Bitcoin “
Just like the Internet disrupted the publishing industry, we’re going to see bitcoin micropayments creating some very interesting opportunities for pay-as-you-go, pay-based-on-time online businesses, and, frankly, some risks as well to the traditional business model as to how things get sold online. “ ” Barry Silbert SecondMarket, Bitcoin Investment Trust On the question of whether bitcoin will replace money, a good analogy is the postal service and email. Email didn’t replace traditional mail, and we still send the same amount of mail today as we did before. But today we have totally new ways of communicating – chat, text, Facebook – things we didn’t imagine when the Internet first arrived. ” Dan Morehead Pantera Capital Management “ Source: CoinDesk, Absolute Return State of Bitcoin Q2 2014 36

The Emergence of the Universal
Bitcoin Company • Universals operate across more than one aspect of the bitcoin value chain (eg Coinplug offers payment processing, wallet, and ATM) • Universal bitcoin companies leverage two key elements of financial services: efficiency and trust • It’s possible that more and more bitcoin startups will pursue the universal model, be absorbed by universals, or fade away Universal State of Bitcoin Q2 2014 39

Bitcoin’s Regulatory Environment is Stabilizing
and Trending Toward the Positive • Recently released minutes from a Federal Reserve Advisory Council and Board of Governors meeting suggest that “banking could participate increasingly in bitcoin fund flows, especially as multicurrency accounts proliferate and reputational concerns subside”. • “The Advisory Committee can't dictate policy, but the minutes can shed light on what Fed policy might look like in the future.” [CNN] • “A task force of US state regulators is working on the first bitcoin rule book with the hope of protecting users of virtual currency from fraud without smothering the fledgling technology. Bitcoin users currently face a range of rules across the 50 states.” [Reuters] State of Bitcoin Q2 2014 55

Bitcoin Continues to See Regulatory
Gains and Setbacks, But Overall Regulation Has Slowed California legalized bitcoin in June 2014 Bolivia made bitcoin and other cryptocurrencies illegal in May 2014 State of Bitcoin Q2 2014 56

Appendix - CoinDesk • Find
out more at www.coindesk.com • Follow us on Twitter: @coindesk • Subscribe to our daily email newsletters for the latest digital currency news • If you have data you think should be included in future State of Bitcoin reports, email stateofbitcoin@coindesk.com • We also welcome any feedback you have on the report State of Bitcoin Q2 2014 58

Disclaimer • CoinDesk makes every
effort to ensure that the information in this presentation is accurate and up to date. We cannot, however, accept responsibility for any loss or inconvenience caused by reliance on the material contained here. • This presentation does not constitute financial advice or an investment recommendation in any way whatsoever. It is recommended that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions. State of Bitcoin Q2 2014 59